06 Oct 2026
Technology creates value. Investors benefit by identifying and owning the businesses best placed to capture it.
For much of the smartphone era, Apple has captured most of the industry's profits despite selling a minority of the world's handsets. Apple's success has not simply been because it built a popular device. It built an ecosystem in which hardware, software, services, brand strength and customer loyalty reinforced one another, creating switching costs and pricing power that competitors struggled to replicate.
It's one of the most important lessons in technology investing. The smartphone transformed the global economy and created immense value for consumers, yet the economics were far from evenly distributed. Although billions embraced the technology, the profits flowed largely to a handful of companies.
Technological success and investment success are not the same thing.
History is full of transformative technologies that changed the world while generating disappointing returns for many of the companies involved. Railways revolutionised transportation, the internet reshaped commerce and smartphones transformed communication. Yet participating in a technological revolution has never guaranteed attractive shareholder returns.
The most successful technology investments have typically shared a common characteristic: they converted innovation into durable competitive advantage. Network effects, switching costs, economies of scale and ecosystem benefits can allow leading businesses to become stronger as they grow. As a result, the biggest winners are often not the firms that invent a technology, but those that develop the strongest ability to retain the value it creates.
Every major technological shift creates an ecosystem of participants. Some make the underlying components, others provide infrastructure, some develop platforms, and others apply technology to disrupt existing industries.
What matters is that value rarely accrues evenly across these participants. A rapidly growing market can still produce disappointing shareholder returns if competition is intense or if the economics ultimately flow elsewhere in the value chain.
Early in a cycle, value may accrue to the businesses enabling adoption. Later, as the technology matures profit pools can migrate. Competitive advantage may move from invention to scale, integration, distribution or customer ownership.
Our approach is to map technology ecosystems and analyse where value is most likely to accrue. We ask simple questions: who controls something scarce, who has pricing power, who owns the customer relationship, and who can retain the resulting cash flows? Technology investing is often less about predicting the future and more about identifying which companies are best positioned to capture the value created by technological change.
Artificial intelligence may prove to be one of the most notable technological developments of our generation. It is already driving significant investment across semiconductors, data centres, networking infrastructure, software and power.
Some of the best software and platform businesses of the last two decades were highly scalable and relatively capital-light. Once built, their products could often be distributed to additional customers at high incremental margins. That combination of growth, scalability and limited capital intensity produced exceptional economics.
AI may not follow the same pattern. Training and deploying advanced models require large and recurring investment in chips, data centres, energy and technical talent. If competition remains intense, and if model capabilities converge over time, a meaningful share of the value created by AI could be passed on to customers or absorbed by the cost of staying competitive.
That does not make AI unattractive as an investment theme. It makes selectivity more important. The most attractive opportunities may be where companies control scarce bottlenecks, own essential infrastructure, benefit from advantaged distribution, or can embed AI into existing products in ways that improve retention, pricing power or engagement.
The distinction is crucial. A company can be central to the AI buildout and still earn poor returns if it must continually reinvest just to maintain its position. Conversely, a company may not own the leading AI model but could still capture value if AI strengthens its positioning within an ecosystem. The key issue is not whether AI creates value, but whether enough of that value ultimately accrues to shareholders after accounting for the capital required to create it.
Apple was one of the great value captors of the last technology cycle. The investment question today is whether AI will reinforce that position or diminish it.
There are reasons for optimism. While much of the discussion has focused on the race to build ever more capable foundation models, there are increasing signs that the performance gap between leading models may be narrowing. If capabilities converge, competitive advantage may depend less on owning the best model and more on distribution, integration and user experience.
That could play to Apple's strengths. Rather than monetising AI directly, Apple may benefit by embedding AI into products and services that hundreds of millions of people already use every day. If AI makes devices more useful, personal and intuitive, it could strengthen engagement, reinforce loyalty and support future upgrade cycles. The company does not necessarily need to own the leading AI model to generate value for shareholders.
Artificial intelligence will almost certainly create enormous value. The harder question is who will capture it.
History suggests that the companies generating the most excitement at the start of a technology cycle are not always those generating the greatest shareholder returns a decade later. Profit pools migrate, competitive advantages evolve, and economics often accrue in unexpected places.
That is why we focus on understanding technology ecosystems rather than simply technologies themselves. By recognising who controls scarce assets, who possesses pricing power, and who is best positioned to retain the resulting cash flows, we aim to identify where value is likely to settle.
Technology creates value. Successful investing depends on identifying the businesses that capture it.